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collective bargaining

Collective bargaining is the negotiation process between an employer and a union comprised of workers to create an agreement that will govern the terms and conditions of the workers' employment.

The result of collective bargaining procedures is a collective agreement.  Collective bargaining is governed by federal and state statutory laws, administrative agency regulations, and judicial decisions. 

National Labor Relations  

The main body of law governing collective bargaining is the National Labor Relations Act (NLRA). It is also referred to as the Wagner Act, and explicitly grants employees the right to collectively bargain and join trade unions. The NLRA was originally enacted by Congress in 1935 under its power to regulate interstate commerce under the Commerce Clause in Article I, Section 8 of the U.S. Constitution. It applies to most private non-agricultural employees and employers engaged in some aspect of interstate commerce. Decisions and regulations of the National Labor Relations Board (NLRB), which was established by the NLRA, greatly supplement and define the provisions of the act.

The NLRA establishes procedures for the selection of a labor organization to represent a unit of employees in collective bargaining. The act prohibits employers from interfering with this selection. The NLRA requires the employer to bargain with the appointed representative of its employees. It does not require either side to agree to a proposal or make concessions but does establish procedural guidelines on good faith bargaining. Proposals which would violate the NLRA or other laws may not be subject to collective bargaining. The NLRA also establishes regulations on what tactics (e.g. strikes, lock-outs, picketing) each side may employ to further their bargaining objectives.

State laws further regulate collective bargaining and make collective agreements enforceable under state law. They may also provide guidelines for those employers and employees not covered by the NLRA, such as agricultural laborers.

Arbitration

Arbitration is a method of dispute resolution used as an alternative to litigation. It is commonly designated in collective agreements between employers and employees as the way to resolve disputes. The parties select a neutral third party (an arbiter) to hold a formal or informal hearing on the disagreement. The arbiter then issues a decision binding on the parties. Both federal and state law governs the practice of arbitration. While the Federal Arbitration Act, by its own terms, is not applicable to employment contracts, federal courts are increasingly applying the law in labor disputes. 35 jurisdictions have adopted the Uniform Arbitration Act (2000) as state law and 14 additional jurisdictions have enacted statutes similar to the UAA. Thus, the arbitration agreement and decision of the arbiter may be enforceable under state and federal law.

Sample of Relevant Supreme Court Cases (in chronological order)

Jones & Laughlin (1937)

In NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937), the Supreme Court upheld the NLRA as constitutional. 

Abood (1977)

In Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977), Michigan authorized an agency shop arrangement. In this arrangement, if an employee is represented by a union, the employee must pay union dues, even if the employee is not a member of the union. Teachers in Detroit public schools claimed that this requirement deprived them of the freedom of association, which was derived from the First Amendment  and Fourteenth Amendment and was created by NAACP v. Patterson, 357 U.S. 449 (1958).

The Court held that if the fees are used by the union for "for collective bargaining, contract administration, and grievance adjustment purposes, the agency shop clause is valid."

The Court also clarified that the freedom of association means that an individual has the right to develop his own beliefs, rather than have them coerced by the State. So, the unions are prohibited from using the non-members' money to further an ideological cause unrelated to the union's duties as a collective bargaining representative. 

Harris (2014) 

In Harris v. Quinn, 573 U.S. __ (2014), personal care assistants who provide in-home care to disabled participants (in a program created by the state) decided to unionize. The collective bargaining agreement between the union and the state included a "fair share" provision. Similar to an agency shop provision, this "required all personal assistants who are not union members to pay a proportionate share of the costs of the collective bargaining process and contract administration." Those workers who opted out sued, claiming that the provision violated their freedom of speech and freedom of association.

The Court held that the "First Amendment prohibits the collection of an agency fee [from the workers] who do not want to join or support the union." In holding this, the Court also drew a sharp contrast with Abood. While Abood focused on public employees, the facts from the present case involve personal assistants, who answer to private customers, rather than to the government. Accordingly, personal assistants "do not enjoy most of the rights and benefits that inure to state employees and are not indemnified by the State for claims against them arising from actions taken during the course of their employment."

The key takeaway from Harris is that Abood does not apply, primarily because the employees in this case are private sector employees, while the employees in Abood are public sector employees. Therefore, Abood does not extend to Harris. 

Lewis (2018)

In Epic Systems Corp. v. Lewis, 584 U.S. __ (2018), the Supreme Court upheld arbitration agreements which barred employees from pursuing work-related claims on a collective or class basis. The Court held that this is clear under the Arbitration Act (9 U. S. C. §§2, 3, 4), which "requires courts to enforce agreements to arbitrate, including the terms of arbitration the parties select."

Janus (2018)

In Janus v. American Federation of State, County, and Municipal Employees 585 U.S. __ (2018), the Supreme Court overruled Abood v. Detroit Board of Education. Therefore, the Janus Court held agency shops to be unconstitutional. 

Further Reading

For more on collective bargaining, see this Nova Southeastern University Law Review article and this more recent California Law Review article. 

Federal Material

U.S. Constitution and Federal Statutes
Federal Agency Regulations
  • Code of Federal Regulations: 29 C.F.R. - Dept. of Labor
Federal Judicial Decisions

State Material

State Statutes
State Judicial Decisions

International Material

Conventions and Treaties

Other Resources

[Last updated in April of 2023 by the Wex Definitions Team]